In Germany, Brazilian president Dilma Rousseff once again criticized the excessive resources being injected into the economy by developed countries to mitigate the effects of the global economic crisis. The monetary expansion, Rousseff argues, produces artificial devaluation of currencies and a speculative bubble.
“When it expands at this rate the money supply produces two effects, one is the artificial devaluation of the currency. Because the non-artificially devaluation is produced by gains in competitiveness of domestic economies. This is equivalent to a tariff barrier and everyone complains about tariff barriers, about protectionism, and this is a form of protectionism.”
And she added: “There is another serious problem, it creates a monetary base that does not go to the real economy, it produces bubble, speculation.”
For the president developed countries should adopt policies to expand investment to deal with the crisis. “The investment not only improves the domestic demand, but also opens the external demand for our products.”
Rousseff also pointed out that Brazil is a sovereign economy and the country will take the necessary steps to protect itself.
The Brazilian president will stay in Germany until Tuesday, March 6. She’s been accompanied by a committee of 200 people, including ministers and business leaders.
Rousseff and the German chancellor (prime minister), Angela Merkel, on Monday had a working lunch and then a private meeting to discuss the international crisis and bilateral cooperation.
There is a full agenda: the strategic partnership agreement of 2002 between Brazil and Germany, the upcoming Rio+20 meeting in June on sustainable development, the G-20, the reform of political and economic institutions of global governance and bilateral relations.
Germany is Brazil’s fourth biggest trade partner, with total volume reaching US$ 24 billion in 2011, an increase of 17.4% over 2010.
The president and the chancellor also participated in the inauguration of an annual technology fair Cebit where the focus this year is on Brazil. It is expected that 350,000 people will visit the Cebit, one of the largest fairs of its kind (4,200 exhibition stands from 70 countries).
One of the most important bilateral Brazil-Germany efforts at the moment is an exchange program Science Without Frontier that is supposed to send over 10,000 Brazilian students to study in Germany between now and 2014.
On the eve of her departure to Germany, the Brazilian leader criticized the European Central Bank’s decision to inject liquidity into financial markets – to the tune of over 500 billion euros.
“Yes, we are concerned with this monetary tsunami. Developed nations have not seen fit to use fiscal policies that could increase investment capacity as a way out of the crisis. Instead, they have literally dumped no less than $4.7 trillion on the world, with adverse, perverse effects mainly in emerging nations,” declared the president.
Dilma went on to say the recent measures adopted in rich nations were “cannibalizing” emerging countries and calling them irrelevant as far as the results produced in money markets were concerned.
“Today we face adverse competition not because Brazilian industry is unproductive, not because the Brazilian worker is unproductive, but because there is a war – an exchange-rate war – due to an expansionist monetary policy that creates unequal conditions of production,” said the president.
Dilma made her comments at a ceremony marking the rollout of the National Commitment to Improved Labor Conditions in the Construction Industry that is to give workers in construction better healthcare, safety, professional qualification and labor union representation.
On the trip to Germany, Dilma Rousseff will be accompanied by the ministers of Foreign Relations, Antonio Patriota; Development, Industry and Foreign Trade, Fernando Pimentel; Communications, Paulo Bernardo; Science, Technology and Innovation, Marco Antonio Raupp; and the head of the presidential press office, Helena Chaves.
Also in the presidential committee are the special aide for International Affairs, Marco Aurélio Garcia, and the governors of Bahia, Jaques Wagner, and Rio Grande do Sul, Tarso Genro.